You can edit almost every page by Creating an account. Otherwise, see the FAQ.

Phillips curve in Latvia

From EverybodyWiki Bios & Wiki

3.2. Phillips curve in Latvia

As the Phillips curve in theory justifies, that high inflation rate and high unemployment rate can not exist simultaneously. At the beginning it can be seen, that there is no existance of the Phillips curve model, but starting from 2013, the realtionship between inflation and unemployment started to be inverse. Higher the uneployment rate, lower the inflation rate and vice versa.

So it can be concluded, that the Phillips curve theory is partly proved in terms of Latvia, because there is no strong correlation between the inflation and unemployment rate.

Conclusions

1. The processes of inflation and unemployment appear to be an integral part of the market economy and nowadays booming problem. 2. In Latvia, inflation expectations are an important factor affecting the actual inflation rate. 3. Level of unemployment dramatically has increased after the crisis in 2009, but now is slowly decreasing. 4. The Phillips curve theory is partly proven by the example of correlation of inflation and unemployment rate in Latvia. 5. During the period of crisis, the relationship was obvious. The unemployment was extremely high, but inflation turned into deflation. 6. In the after-crisis period the relationship seems to exist, but proves less pronounced.   Recommendations

1. In order to prevent the high level of inflation, there must be no deficit of the government budget and strict financial politics. 2. Policies to reduce structural unemployment include the provision of job training and information about labor-market conditions in other regions. 3. To reduce unemployment, government should also support small business and contribute to regional business more. 4. Macroeconomic policy should be balanced. The optimal proportion of inflation and unemployment should be found.

References[edit]

1. Sloman J. (2012), Economics, Prentice Hall 2. Mankiw, N.G. (2005), Macroeconomics, Worth Publishers 3. Becker G.S. (2007), Economic Theory, Transaction Publishers 4. http://www.csb.gov.lv/ , Central Statistical Bureau of Latvia


This article "Phillips curve in Latvia" is from Wikipedia. The list of its authors can be seen in its historical and/or the page Edithistory:Phillips curve in Latvia. Articles copied from Draft Namespace on Wikipedia could be seen on the Draft Namespace of Wikipedia and not main one.